The lower cost of operating in the Cuban oil sector and improving Western diplomatic ties means good things for early movers, an Australian company said.

Independent oil company MEO Australia said a number of the wells drilled near the coast of Cuba in so-called Block 9 have recovered oil. Information gleaned from data from Block 9 gave the company confidence about the potential for significant prospects onshore Cuba.

CEO Peter Stickland said the area is the company's highest priority asset. Data received so far suggests the area is rich in petroleum, with early 2016 representing a watershed moment for onshore Cuba.

"The low operating costs in the Cuba support strong profitability levels even in depressed oil price conditions and the improving diplomatic relations with the U.S. is expected to drive substantial foreign investment over the coming years," he said in a statement.

The Cuban government in 2014 enacted legislation offering corporate tax credits to encourage foreign investments. The U.S. government the same year started easing a 54-year trade embargo on Cuba and later reopened its embassy in Havana.

According to MEO, Cuba produces about 80,000 barrels of oil per day. Canada's Sherritt International, the only foreign company producing in Cuba, estimates operating costs of around $9 per barrel.

Estimates from the U.S. Geological Survey last year found there were about 4.6 billion barrels of crude oil and 9.8 trillion cubic feet of natural gas in the form of undiscovered, technically recoverable, reserves in Cuba. About three quarters of that is said to be located within 50 miles from shore.

"Interest in investing in the oil industry in Cuba continues to grow," Stickland said.